Air Cargo Ton-Miles-A Statistic of Growing Importance

K. WILLIAM HORN Research Analyst, Air Transport Association of America

This paper is designed to show the manner in which cargo ton-miles are reported by the airline industry and the growth of cargo traffic during recent years. It covers procedures used by the air carriers to report periodically to the Civil Aeronautics Board and the Air Transport Association of America. CAB and ATA reports on air cargo traffic are also discussed. The significant increase in cargo ton-miles is pointed out by charts showing the growth in airline freight traffic from 1939 to 1963 and comparing this traffic with that of other modes of transportation.

•AIR TRANSPORTATION had its beginning in the cargo transportation field. In 1911, the first U.S. airmail experiments began with a flight on Long Island, New York, of a total distance of 10 miles. From this early start, the airlines became familiar with the ton-mile statistic, and today it is a highly significant and much used figure in the a viati on industry.

GROWTH OF THE INDUSTRY During the early growth of air transportation, air freight played a secondary role to the carrying of passengers. In 1948, less than 300 million revenue ton-miles of cargo­ freight, mail and express-moved by air. Since 1948 significant increases have been made in air cargo traffic, including international and domestic service, by the U.S. ~rhPrh1lPrl ::iirlinP.!=: (Fif!'. ll. In 1963. annroximatelv 1. 3 billion cargo ton-miles were flown in domestic service by the sch~d~l~d and supplemental air ca;riers (Table 1). The certificated route air carriers transported 644, 552, 000 ton-miles of freight in scheduled domestic service in 1963, about 90 percent more than was carried in 1958 (Tables 2 and 3). According to the Civil Aeronautics Board, freight accounted for 16 percent of all revenue ton-miles flown, both cargo and passenger, and of this amount 43 percent was in all-cargo service. Based on estimated figures, the certificated route carriers accounted for 821,414,000 freight ton-miles in scheduled service in 1964, an increase of about 27 percent over the 1963 period. In 1963, the scheduled airlines offered the public more than 10,000 flights a day, all of which carried some kind of cargo: mail, express, or freight. The eleven U.S. trunk and three all-cargo airlines flew 864 million ton-miles of cargo in scheduled domestic operations, a 10. 5 percent increase over the 782 million ton-miles carried in 1962. Airfreight ton-miles in 1963 totaled 631 million, a 13. 5 percent increase. Ex­ press ton-miles totaled 65. 7 million, up 0. 6 percent; mail volume climbed 4. 7 percent to a total of 168. 1 million ton-miles. The results for 1964 will show even more sig­ nificant increases. Air cargo is expected to total 1. 06 billion ton-miles for the trunks and all-cargo airlines. The sharp growth rate and expectations by the airlines in regard to cargo potentials are reflected in the increase in the number of large turbo-fan jets and turboprop cargo aircraft being acquired. During 1963, cargo capacity of the airlines greatly increased

Paper sponsored by Committee on Intercity Highway Freight Transportation and presented at the 44th Annuai Meeting. 95

1,500 TABLE 1 DOMESTIC INTERCITY FREIGHT BY MODES'

Tons-Mlles (billions)

Oil Great Rive1·s and Year Atrb R.,il Truck Total Pipeline Lakes Canals 1,200 1939 0. 01 339 53 56 76 20 544 1940 0. 02 379 62 59 96 22 618 1941 0, 02 482 81 68 114 27 772 1942 0. 04 645 60 75 122 26 928 1943 0.05 735 57 98 ll5 26 1,031 1944 0. 07 747 58 133 119 31 1,088 1945 0.09 691 67 127 113 30 1,028 1946 0, 08 602 82 96 96 28 904 900 1947 0, 11 665 102 105 112 35 1,019 1948 0. l5 647 116 120 119 43 l,045 1949 0. 20 535 127 115 98 42 917 1950 0, 30 597 173 129 112 52 1,063 1951 o. 34 655 188 152 120 62 1,177 1952 0. 34 623 195 158 105 64 1,145 1953 0, 37 614 217 170 127 75 I, 203 1954 0, 38 557 213 179 91 83 1,123 [955 0, 49 63l 223 203 ll9 98 I, 274 600 1956 0. 58 656 249 230 111 109 1,356 1957 0. 68 626 254 223 117 115 1,336 1958 0, 70 559 256 211 80 109 1,216 l959 0, 80 582 209 227 BO 1 l 7 1,296 1960 0. 89 579 299 229 100 123 1,331 1961 1.0 570 313 233 87 124 1,328 1962 1.3 600 331 238 90 l33 1,393 1963 I. 3 629 348 243 97 143 l, 461 300 alncludes mail and express l>ut not intercoastal and coastwise ton- miles; based on clata from the Transportation Association of Ame1·- ica, Interstate Commerce Commissio11, and ClvH Aeronautics Board, bJncludes domeslic scheduled and chai·ter service of the U.S. sched- uled airline industry, both passenger/cargo and all-cargo carriers, and lhe &Um,lemental air I ines.

1948 1953 1958 1963 as the first all-cargo jets were placed in­ Figure 1. Revenue cargo ton-miles in mil­ to U.S. scheduled airline service. At the lions per year carried by U.S. scheduled beginning of 1964 about a dozen of these airlines. jets were being operated by U.S. carriers. Each jet freighter is capable of hauling a load of more than 40 tons nonstop from coast to coast. Despite the gains made during recent years, however, the gross amount of do­ mestic intercity cargo hauled by air is presently less than 1 percent of the total TABLE 2 handled by all transport modes (Table 4). REVENUE FREIGHT TON-MILES FLOWN BY Although this amount is small in com­ CERTIFICATED ROUTE AIR CARRIERS IN parison to total freight haulage, it is still SCHEDULED DOMESTIC SERVICE, 1950-1963a very important to the airlines.

Ton-Miles Year (thousands) TABLE 3 1950 173,102 REVENUE CARGO TON-MILES FLOWN BY 1951 175,516 CERTIFICATED ROUTE Affi CARRIERS IN 1952 202,472 SCHEDULED DOMESTIC SERVICE, 1963a 1953 210,098 1954 206,598 Ton-Miles 1955 267,680 Traffic Category 1956 298, 495 (thousands) 1957 350,011 1958 337,898 Freight 644,552 1959 393,606 Express 70,017 1960 417,550 Priority U.S. mail 145,929 1961 472,625 Non-priority U.S. mail 29,518 1962 567,720 Excess baggage 25,001 1963 644, 552 Total 915, 017 aSource: Civil A~ronautics Board aSource : c;vil Aeronautics Board 96

TABLE 4 TON-MILE REPORTS PERCENTAGE OF INTERCITY FREIGHT BY MODEsa For the industry to maintain an accurate Oil Great Rivers Year Rail Truck Pipeline Lakes and Canals accounting of the ton-miles of cargo car­ ried, the airlines are required to compile 1939 62. 3 9, 7 10. 3 14. 0 3.7 1940 61. 3 10. 0 9. 5 15 . 5 3. 6 and report to the government periodically 1941 62. 4 10. 5 8. 8 14, 8 3. 5 the ton-miles of cargo being transported. 1942 69. 5 6, 5 8, 1 13 . 1 2. 8 1943 71. 3 5, 5 9. 5 11. 2 2. 5 The figures are used as an aid in analyz­ 1944 0 , 01 68 . 7 5. 3 12. 2 10. 9 2. 8 ing the traffic and financial results of a 1945 0. 01 67. 2 6. 5 12. 4 11.0 2. 9 1946 0, 01 66. 6 9.1 10. 6 10. 6 3. 1 particular carrier as well as those of the 1947 0. 01 65. 3 10. 0 10. 3 11.0 3. 4 entire industry. . 1948 0.01 61. 9 11 . 1 11. 5 11 . 4 4. 1 1949 o. 02 58. 3 13. 8 12. 5 10. 7 4. 6 There are two groups primarily en­ 1950 0. 03 56. 2 16. 3 12. 1 10. 5 4. 9 1951 0. 03 55. 6 16.0 12. 9 10. 2 5, 3 gaged in the collection and dissemination 1952 o. 03 54. 4 17. 0 13. 8 9. 2 5. 6 of airline statistical data: the Civil Aero­ 1953 0. 03 51. o 18. 0 14. 1 10. 6 6. 2 1954 0. 03 49. 6 19. 0 15. 9 8. 1 7. 4 nautics Board, which is charged with the 1955 0. 04 49. 5 17. 5 15 , 9 9, 3 7. 7 regulation of commercial air transporta­ 1956 0. 04 48. 4 18, 4 17. 0 8. 2 8. 0 1957 o. o5 46, 9 19. 0 16. 7 8. 8 8. 6 tion, and the Air Transport Association of 1958 0. 06 46. 0 21.1 17. 4 6. 6 9. o America, which represents the vast ma­ 1959 0, 06 44. 9 22. 3 17. 5 6. 2 9. o 1960 0. 07 43. 5 22. 5 17. 2 7. 5 9. 2 jority of the carriers comprising the cer­ 1961 0. 08 42. 9 23, 6 17. 5 6. 6 9. 3 tificated airline industry. Both groups 1962 o. o9 43 . 1 23. 8 17. 1 6. 5 9. 5 19 63 o. 09 43.1 23. 8 16. G 6. 6 9. 8 compile airline data on the financial and alncludes mall and express but not intercoastal and coastal traffic status of the air carriers. The ton-miles; based on data from Transportation Association statistics compiled by ATA are consoli­ of America, Interstate Commerce Commission, and Civil Aeronautics Board. dated industry figures and are not broken b!ncludes domestic scheduled and charter service of the U.S. down by carriers, whereas the CAB re­ scheduled airline industry, both passenger/cargo and all­ cargo carriers, and the supplemental airlines. ports the financial and traffic statistics of each of the U.S. certificated carriers, as as well as overall industry statistics. Each certificated air carrier is required to report its ton-miles of freight handled per month on the Monthly Statement of Summarized Traffic and Capacity Statistics, CAB Form 41. The report is compiled and submitted every month to the CAB in ac­ cordance with the Board's Uniform System of Accounts and Reports for Certificated Route Air Carriers. In general, the cargo ton-mile figures entered by the carriers on Form 41 are de­ termined by computation from flight records. Total revenue ton-miles are entered on the report along wit.}]. non-revenue ton-miles under the heading, Traffic on Revenue Flights. In addition, for reporting purposes, revenue cargo ton-miles are divided in­ to the followin$ categories: (a) U.S. mail-priority, (b) U.S. mail-non-priority, (c) foreign mail, (d) express, (e) freight, and (r) excess baggage. There is no breakdown by type of commodities hauled since the air carriers are not required to furnish this information on a regular basis to the Board. The Board's Research and Statistics Division compiles and publishes the monthly figures in its booklet, Air Carrier Traffic Statistics. Consolidated industry figures and statistics covering each certificated route operator are included. At the end of the year the annual data, along with other statistical material covering the entire annual period, are computed and released in the Handbook of Airline Statistics. With the submission of the report of Form 41 to the Boa1•d, a copy is furnis hed to the Air Transport Association by each of its member carriers. From these, ATA computes the industry totals on a quarterly basis and publishes them in a booklet en­ titled Quarterly Review-Airline Traffic and Financial Data. This publication contains a breakdown of revenue ton-miles carried, by passengers, priority mail, non-priority mail, express, freight, charter, excess baggage and foreign mail for the various classes of air carriers as well as the consolidated industry figures. Other traffic and financial information is included. Calendar year-end figures covering the twelve­ month period in comparison with previous years are reported in an annual publication Air Transport Facts and Figures (Table 5). Generally speaking, the statistical data released by ATA are more current and pre­ liminary in nature than those of the CAB. · ATA is primarily concerned with processing 97

TABLE 5 REVENUE TON-MILES OF TRAFF1C CARRIED BY U. S. SCHEDULED AIRLINE INDUSTRya

Ton-Miles (thousands) Carrier Priority Non-Priority Excess Charter Passenger Express Freight Total U.S. Mail U.S. Mail Baggage Flights

Domestic trunk airlines: 1959 2,672,087 98,487 17, 929 53, 107 282,472 29,419 13, 271 3,166,772 1960 2,777,148 108, 061 22, 845 55, 440 320,950 29,071 18,968 3,332,483 1961 2,806, 469 117,929 26, 762 56,745 384, 161 26, 881 16, 270 3,435,218 1962 3,023,888 131,711 28, 501 64, 879 473,955 25, 430 22, 665 3,771,029 1963 3,456,932 138,661 28, 402 64,915 520,631 23, 797 24, 227 4, 257, 565 Local se rvice airlines: 1959 97,516 1, 693 503 2,211 3, 125 711 3,061 108, 820 1960 108,652 2,110 587 2,419 3,845 799 2, 744 121, 155 1961 127,602 2,771 584 3, 019 5,492 875 2,084 142,428 1962 152,662 3,288 545 3,772 7, 218 990 I, 837 170,312 1963 177,555 3,766 587 4,312 9.026 1,004 2,096 198, 346 Intra-Hawaiian airlines: 1959 8,879 76 I, 625 30 2,058 12, 668 1960 10,156 82 5 1,806 31 5,605 1 7, 685 1961 10, 047 82 14 1,846 31 494 12, 515 1962 10, 308 90 19 2,100 51 10 12, 578 1963 11,519 93 21 2, 151 40 285 14, 109 Helicopter airlines: 1959 710 87 41 7 4 7 856 1960 901 91 40 7 5 10 1,053 1961 818 94 40 7 5 6 969 1962 779 65 44 6 3 10 907 1963 l, 188 74 44 6 4 16 1, 332 Intra -Alaskan airlines: 1959 3,872 1, 501 2, 140 116 3,869 11,498 1960 4,434 1, 796 2,422 127 1,844 10, 625 1961 4,741 2,209 2, 829 135 1,929 11, 843 1962 4,874 2,576 2,620 147 3,211 13,428 1963 4,796 2, 832 2,640 155 6,027 16, 450 All-cargo airlines (domestic): 1959 582 161 1,250 104, 237 168,049 274, 279 1960 674 233 1,050 88,516 159, 224 249, 697 1961 407 261 754 78 , 286 215, 352 295, 060 1962 175 146 417 81 , 816 389,536 472,090 1963 504 505 748 110,096 231,410 343, 263 International and territorial airlines: 1959 706,696 73 , 697 21 481 158,868 12,897 139,878 1,100, 817 1960 831 , 066 82, 626 12, 233 520 191,065 13 , 922 78,350 1,218, 245 1961 877,022 93,220 42, 492 609 216,561 13,191 110,247 1, 362, 428 1962 1,017,184 108,987 52, 760 798 263 , 931 15, 125 150, 848 1,619,903 1963 1,187,055 115,811 54,477 794 295, 610 16, 821 174,431 1, 855, 967 All-cargo airlines (international): 1959 5, 547 36, 579 16, 178 58, 383 1960 6,567 2, 658 34, 853 28, 79 6 73,091 1961 6,425 5, 968 4 43, 764 76, 823 133,094 1962 4,441 6, 602 14 66, 537 99, 759 177,497 1963 4,663 6, 205 21 82,917 72, 111 166, 165 Consolidated industry: 1959 3,489,760 181,670 18, 614 57, 090 589,053 43, 177 346,371 4,734,093 1960 3, 732, 533 202,007 38, 565 59,469 643,468 43,955 295, 606 5, 024,283 1961 3,827,038 223, 139 76,087 61, 167 732, 951 41,118 423 , 231 5, 393, 933 1962 4, 209,926 251,333 88,578 69,925 898, 187 41 , 748 668, 136 6, 238 , 246 1963 4,839,045 266,404 90,197 70,834 1,023,077 41,821 510,603 6, 880, 845

:.,In !:;Ollie jm;ta.nccs individu.s..1.l i"ic;urcs HJLo.~: 1:ot '.'1.dd to totals \Jccuusc or rowtclinc; forcic,n rnni l ton-miles curried by inter- n~·,tion~>.l and t2rritorial ,1_irlim::s nnd b;,- all- cu1·c;o airlines in intcrncstlonll operutio1ts are included only in the totol ton- r1ik colwm.

and disseminating statistics of major importance to aviation interests as quickly and as rapidly as is feasibly possible. 98

The Bureau of the Census, since January 1962, has been publishing monthly reports by weight and value of commodities being transported by air in the U.S. foreign trade. Ton-miles, however, are not computed. The reports, which are compiled from ex­ port documents, contain a breakdown of some 60 commodities imported by air and 100 commodities exported by air. Items listed include auto, truck and bus parts, elec­ tronic computers, contracting and excavating machinery, and eggs. The reports can be helpful to marketing specialists. For example, one recent re­ port showed that 3,900 tons of machinery and vehicles were transported to the United Kingdom by air in 1963 along with 413 tons of man~made fibers and manufactures, 379 tons of photographic and projection equipment and 333 .tons of electrical measuring and testing equipment. Four reports are issued monthly and are followed by an annual summary. Two con­ cern U.S. airborne exports of domestic merchandise, one with the commodities listed by the countries of destination and the other with the countries of destination by com­ modities. The other two pertain to imports involving origin countries.

TERMINOLOGY The statistical data on air cargo have been somewhat misleading. The terminology used does not always indicate exactly what is meant by terms such as airfreight and air cargo. The broader definition of air cargo may include airmail, non-priority surface mail moving by air, parcel post, excess baggage, cargo tendered by the Rail­ way Express Agency as air express, cargo tendered by the airfreight forwarders, and cargo tendered as airfreight under published airfreight tariffs. Writers using the terms air cargo or airfreight might have one or any possible combination of these items in mind. The industry provides passenger ton-mile data which may be included in certain overall ton-mile figures. Such total ton-mile figures can be misinterpreted. Also, in the interpretation of ton-miles there is some confusion as to what segment of the industry is included in a given stated figure. Seven classes of air carrier operators in the United States have certificates of con­ venience and necessity authorizing them to conduct regularly scheduled services. These classifications are used by the CAB in connection with the economic regulation of the industry and, under the Federal Aviation Act, are based largely on the scope of operations authorized or allowed by the Act. These classes are as follows: 1. Domestic trunk carriers. -This category includes carriers with permanent operating rights wit.l1in tJ1e continental United States, ThP.rP. arP. <'.urrP.ntly eleven trunk lines operating primarily over high-density traffic routes between principal traf­ fic centers. These carriers conduct both scheduled and nonscheduled, or charter, service. In 1963, records were set by these airlines in all categories of cargo traffic in scheduled operations. Freight ton-miles were 520,631,000, a gain of 9. 8 percent over 1962; mail ton-miles were 167,063,000, a gain of 4. 3 percent; express rose to 64, 915, 000 ton-miles. In 1964, according to estimates, freight will be up 24. 7 per­ cent, mail 7. 6 percent, and express 8. 7 percent over 1963 figures. 2. Domestic local service carriers. -There are presently 13 of these carriers operating routes of lesser traffic density between the smaller traffic centers and be­ tween these and principal centers. In 1963, they carried 25. 0 percent more freight, 13. 6 percent more mail, and 14. 3 percent more express than in 1962. In 1964, it is estimated freight will increase 32.1 percent, mail 16. 2 percent and express 19. 9 percent over the 1963 period. 3. Helicopter carriers. -Helicopters operate between airports, central post of­ fices, and the suburbs of New York, Chicago, Los Angeles and San Francisco. Cargo volume of the four carriers in 1963 amounted to 74, 000 ton-miles of air mail, an in­ crease of 13. 8 percent over 1962; also carried were 44,000 ton-miles of express and 6, 000 ton-miles of freight, both of which matched 1962 achievements. 4. Intra-Hawaiian carriers. -The two airlines comprising this class operate be­ tween the several islands of Hawaii; they carried 2, 151, 000 ton-miles of freight in 1963, a gain of 2. 4 percent over 1962, and 114, 000 ton-miles of mail, an increase of 4. 6 percent. They made substantial gains in 1964. 99

5, Intra-Alaskan carriers. -In 1963, the eight carriers which provide service in the State of Alaska carried 2,832,000 ton-miles of airmail for an increase of 9. 9 per­ cent over 1962, and 2,640,000 ton-miles of freight, a 1. 0 percent increase. Esti­ mates for 1964 point to further increases in cargo traffic transported by this group of carriers. 6. International and territorial carriers. -This service includes all U.S. F1ag air carriers operating between the United States and foreign countries other than Canada and over international waters. These 18 carriers moved 295,600,000 ton-miles of freight in 1963, an increase of 12. 0 percent over 1962, 170,288,000 ton-miles of mail, an increase of 5. 3 percent, and 794,000 ton-miles of express, down about 1. 0 percent. It is estimated that during 1964 freight ton-miles for this group of carriers jumped about 30 percent over 1963. 7. All-cargo carriers. -Scheduled flights carry freight, express and mail between designated areas in the U.S. and in one case to the Caribbean and in another to Europe. These carriers in domestic scheduled service carried a record of 110,096, 000 ton­ miles of freight in 1963, representing a 34. 6 percent increase over 1962. Mail volume was 1,009,000 ton-miles, an increase of 8. 3 percent; express volume was 748,000 ton-miles, an increase of 79. 6 percent. Charter freight operations declined, how­ ever, by about 41 percent to 204,581,000 ton-miles. In addition, supplemental air carriers conduct passenger and cargo charter serv­ ice, as well as scheduled operations on a limited temporary basis. There were 15 such companies as of February 1, 1964. The supplemental carriers transported 171,067,000 ton-miles of freight in domestic service in 1963 compared to 115,171,000 in 1962.

A LOOK AHEAD Although the airlines account for less than 1 percent of the total intercity ton-miles, the cargo they carry is of high value. This cargo, especially since it includes mail and express, is being considered more and more an indicator of business activity and economic growth. There have been various predictions on the growth rate of domestic airfreight. It is, of course, difficult to say just what the figure will be. Airfreight, however, can be expected to increase by 20 percent or more in 1965 over 1964. Some foresee an increase of 120 percent by 1970 and an increase of 250 percent by 1975, bringing the total to more than 2. 8 billion ton-miles in domestic scheduled service. With the increased availability of the economical cargo jets and the improvement of handling methods, the cost of shipping by air will undoubtedly decrease in the future. Cargo ton-miles should expand at a faster rate than passenger miles, and it appears the air carriers will capture a larger share of the total freight market. When compared to other modes of transportation, the airfreight business is still in an embryonic stage, but we can look forward to definite growth. As airfreight in­ creases, more detailed reporting procedures will be required and eventually tonnage and ton-mile figures by commodity groups will be developed as in the other transport modes.